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Job Cuts Lowest in 5 Months

Layoffs across the United States fell by half in May from the previous month, indicating the pace of job cutting may be slowing down, according to the latest report from global outplacement consultancy Challenger, Gray & Christmas.

U.S.-based employers announced 30,157 layoffs last month, a number 53 percent lower than the 64,141 job cuts announced in April. The figure is the lowest monthly job cuts total since December 2015, when 23,622 job cuts were recorded.

Employers have announced 275,218 job cuts so far in 2016, a total 13 percent higher than the layoffs announced during the first five months of 2015.

“May could be the start of a summer slowdown in the pace of job cutting as companies take a pause following the period of heavy downsizing that started the year,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

“Of course, not every summer brings a slowdown in job cuts,” he continued. “Last July saw announced layoffs soar to a four-year high of 105,696”; however, that was primarily due to massive downsizing in the military.

May’s layoffs were once again led by the energy sector. Energy firms announced 7,572 layoffs during the month, for a year-to-date total of 75,232.

Other industries reported declines in job cuts. Among the most significant was in the computer industry, where layoffs fell 83 percent from April, to 2,836 in May. Job cuts in the financial sector plunged 68 percent, to 901 in May; and retailers announced 75 percent fewer cuts in May, at 1,287.

Challenger said that the summer months can be a time when the general pace of business slows, including hiring and firing, as decision-makers take vacations and analyze results from the first half of the year.

Year-to-date, the retail (38,264), computer (36,853), industrial goods (18,406), and health care (9,642) sectors rounded out the top five for number of layoffs. Texas leads in layoffs year-to-date (71,787), followed by California (37,558), Arkansas (17,284), Illinois (11,515) and New York (10,155).